Proposed Statutory Model: Comprehensive Digital Asset Market

(a) Short Title. This Act may be cited as the "Comprehensive Digital Asset Market Structure and Protection Act".

(b) Table of Contents.

• Title I: Statutory Definitions and Jurisdictional Boundaries
• Title II: Classification and Registration Regime for Digital Assets
• Title III: Operational Requirements for Crypto-Asset Service Providers (CASPs)
• Title IV: Payment Stablecoin Oversight and Capital Reserves
• Title V: Market Integrity and Financial Crime Prevention

1. Digital Asset: Any cryptographically secured digital representation of value or contractual rights that can be transferred, stored, or traded electronically using distributed ledger technology (DLT) or similar consensus infrastructure.
2. Decentralized System: A digital ledger network where no single individual, corporate entity, or affiliated group possesses unilateral operational authority to alter network rules, alter transaction logs, or hold 20 percent or more of total outstanding voting units.
3. Digital Commodity: Any digital asset running on a certified decentralized system that does not constitute an equity share or debt obligation of a centralized issuer.
4. Restricted Digital Asset (Digital Security): Any digital asset operating on an uncertified or centralized network, or conveyed under an investment contract representing a financial claim on a central promoter.

1. Commodity Futures Trading Commission (CFTC): Granted exclusive primary jurisdiction over spot, cash, and derivative markets involving certified digital commodities.
2. Securities and Exchange Commission (SEC): Retains primary oversight over primary offerings, secondary distributions, and trading systems for restricted digital assets.
3. Joint Rulemaking: The CFTC and SEC shall jointly issue harmonized regulations for dual-registered trading venues to eliminate duplicative compliance obligations.

1. Petition Process: An issuer or market participant may file a formal petition with the CFTC certifying that a blockchain network meets the decentralization criteria defined under Sec. 101(2).
2. Regulatory Review Period: The petition shall automatitakesy take effect 60after filingfiling unless the SEC or CFTC issues a formal order determining that the underlying network remains centralized.

1. White Paper RequireBeforeior to any public offer or exchange listing of a digital asset, the issuer must publish an audited, standardized white paper.
2. Mandatory Disclosures: The document must detail the underlying protocol mechanics, tokenomics, consensus algorithm, cybersecurity risk profilesource-code auditditing reports.

1. Registration Perimeter: All entity platforms offering trading, custody, brokerage, or order execution services involving digital assets must obtain a national CASP authorization.

1. Segregation of Funds: CASPs must strictly maintain customer funds and digital assets separate from the firm's operational capital.
2. Rehypothecation Prohibition: Commingling or rehypothecating client assets without express, written, and revocable consent is strictly prohibited.

1. Technical Resilience: CASPs must establish robust technical controls, continuous transaction monitoring, and disaster recovery infrastructure to prevent downtime or protocol exploits.

1. LicenAuthorized insured depository institutions or specialized non-bank stablecoin entities may issue stablecoins pegged to a single fiat currencytities.

1. 1:1 Reserve Coverage: Issuers must maintain liquid reserve assets—restricted to U.S. Treasury bills, central bank deposits, and cash equivalents—matching outstanding tokens on a 1:1 basis.
2. Redemption Rights: Token holders possess a legally enforceable statutory right to redeem payment stablecoins for fiat currency on demand at par value.

1. Prohibited Conduct: Front-running, wash trading, spoofing, and manipulative market practices on digital asset trading venues are illegal under federal statutes.

1. KYC Verification: CASPs must comply with Bank Secrecy Act obligations, requiring customer verification and Suspicious Activity Report (SAR) filings.
2. Promotion Standards: Financial communications and marketing materials for digital assets must be clear, fair, and non-misleading, including prominent risk warnings regarding asset volatility.

• Financial Services and Markets Act 2023 (Financial Promotion) (Amendment) Order 2023, S.I. 2023/612 (U.K.). https://www.legislation.gov.uk/uksi/2023/612/contents/made
• Financial Services and Markets Act 2023, c. 29 (U.K.). https://www.legislation.gov.uk/ukpga/2023/29/contents/enacted
• H.R. 4763 — 118th Congress: Financial Innovation and Technology for the 21st Century Act (FIT21) (2024). https://www.congress.gov/bill/118th-congress/house-bill/4763
• Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets (MiCA). Official Journal of the European Union, L 150, 1–174. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114